Housing and Urban Development Corporation Ltd (HUDCO) has reduced its lending rates by up to 125 basis points - both for the government and the private sector. The new interest rates, which are in tune with the current market trend, will be effective from 23 June.
HUDCO has reduced its rate of interest on project loan by 50 basis points and for individual home loan (HUDCO Niwas) between 100 to 125 basis points for loan up to Rs20 lakh for floating rate of interest.
The revised rate of interest will be effective from 1 January, 2009, KL Dhingra, CMD of HUDCO said in a release.
This is in line with the government's vision on the `shelter for the poor', a government release said, adding that Kumari Selja, minister for housing and urban poverty alleviation and tourism has emphasised on a focused approach on social housing and affordable housing.
The ministry expects HUDCO to release funds to this category at the most competitive rates.
The reduction in lending rates from 9.50 per cent to 8.50 per cent (floating) for EWS Housing (special category-for widows, SCs/STs) and 9.75 per cent to 8.75 per cent for EWS Housing is being subsidised by HUDCO to benefit the poor borrowers, it said.
As per the MoU signed between HUDCO and the ministry, 84 per cent of the total dwelling units sanctioned for the year 2009-10, should cover EWS and LIG units.
Out of the total loan sanctioned for housing sector, HUDCO has been able to fund over 95 per cent for the EWS and LIG categories.
The reduction in rates of interest would go up to 125 basis points in respect of the other commercial projects of public sector borrowers, police organisations, sate government borrowings, real estate projects and power projects and also for private sector projects.